Monday, May 29, 2017

Analysis of Fugro 2017

Business: A Dutch geotechnology company. They still have their four subunits: Geotechnical (resolve geotechnical problems offshore, nearshore and onshore), Survey (all kind of offshore and geospatial surveys for the development of oil and gas platforms), Subsea Services (repair, construction etc.) and Geoscience (seismic and seabed databases for the exploration of new projects).

The P/E of Fugro is horrible due to losses with -3.7 but the P/B is pretty ok with 1.2 still due to the losses it is a no go for Graham.

Earnings to sales and ROE makes little sense due to the losses but the book to debt ratio is at 0.8 which is ok.

In the last five years they have shown a yearly negative revenue growth rate of -3.9% which is awful and this then gives a modified P/E of around 8 which means that Fugro is overvalued on the market today.

They do not pay out a dividend so at least that is something that I like to see when a company is making losses.

Conclusion: Graham says no to Fugro and so do I since I still do not see a turn around happening. Due to the latest share price drop I tried to figure out if their "competitor" that bought up a lot of shares have decided to step away from Fugro again but I did not find any information in that direction. Anyway.. Fugro need to show one or two good quarters before it will be of interest to invest in it. I will remain as a grumpy shareholder.